The CFTC (Commodity Futures Trading Commission) filed a complaint in the US District Court for the Central District of California on Wednesday against five individuals for allegedly “fraudulently soliciting” money from over 170 people.
The five individuals namely David Carmona, Juan Arellano Parra, Moses Valdez, David Brend, and Marco A. Ruiz Ochoa, were accused of operating under the business name Icomtech and promising to trade bitcoin and other assets on behalf of these individuals.
The alleged fraudulent activities took place between August 2018 and December 2019.
During this period, the five individuals and other agents associated with Icomtech reportedly made false representations to customers, claiming that they would use the invested funds to trade Bitcoin and other digital asset commodities.
They promised high returns and even claimed to double customers’ money within a few months. However, according to the Commodity Futures Trading Commission(CFTC), these promises turned out to be empty, and the customers’ funds were misused.
The CFTC alleges that instead of using the funds as promised, the defendants used the money to further promote their scheme. Additionally, it is believed that they used the funds for personal expenditures, as well as paying themselves commissions and bonuses. Shockingly, some Icomtech customers reportedly lost all of their invested funds.
The CFTC has stated that Carmona and Arellano are currently in federal custody. In their complaint, the regulator classified Bitcoin, Ether, and USDC as “commodities.”
According to the complaint, various Icomtech promotional events were held throughout California, attracting hundreds of attendees. These events were used to lure potential investors into the scheme.
CFTC Commissioner Kristin Johnson drew parallels between the alleged fraud and an “old-school Ponzi scheme” in a statement.
Johnson expressed her commitment to raising awareness about fraud that preys on vulnerable investors, exploiting their relationships, kinship, and social network connections. She emphasized that perpetrators often target specific communities due to their familiarity with the fears and challenges that may discourage investors from reporting the fraud to law enforcement or regulatory authorities.
Also read: CFTC Technology Committee met in Washington to Discuss DeFi
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